Significant increase in fuel prices in Pakistan. HSD

ISLAMABAD: In an unprecedented move, the federal government increased the price of gasoline by 43% and diesel by 55%.

Petroleum Minister Ali Pervaiz Malik announced a price increase of Rs 137.23 per litre for gasoline and Rs 184.49 per litre for High Speed Diesel (HSD) on Thursday at a press conference with Finance Minister Muhammad Aurangzeb. The announcement was made in response to the spike in global oil prices caused by the US-Israel war in Iran.

According to him, the new fuel and HSD prices are set at Rs 458.40 and Rs 520.35 per litre, respectively. Since March 1, 2026, the government has already borne Rs 129 billion in price effect from the world’s oil prices.

The chief ministers of four provinces and government-affiliated parties were consulted during the decision-making process. He said, “We are grateful to the President, government allies, and chief minister who promised full support in the current fuel crises.”

A package of tailored subsidies and energy-saving initiatives was revealed by Aurangzeb, indicating a clear move away from general relief and toward more targeted assistance for needy groups.

In order to guarantee fair distribution and prevent abuse, the finance minister declared that the government will offer motorbike riders a three-month petrol subsidy of Rs. 100 per litre, with a monthly maximum of 20 gallons per customer.

Acknowledging growing input costs and the financial strain on rural populations, Aurangzeb announced that small farmers would get Rs1,500 per acre to cover harvesting expenses in a significant relief move for the agriculture industry.

Targeted assistance was also given to the transportation industry.

Additionally, intercity public transportation would get a diesel subsidy of Rs. 100 per litre.

For intercity cargo transportation, the government would provide a subsidy of Rs. 100 per litre.

The finance minister added that trucks and cargo transit will receive a fuel subsidy of Rs. 70,000 per month.

Larger commercial trucks would earn an additional Rs8,0000, while passenger vans will get Rs100,000 per month for the first month. He said that the efficacy and financial viability of these incentives will be evaluated the following month.

The minister also affirmed that Pakistan Railways will get a subsidy in order to keep rates reasonable and guarantee business continuity in the face of growing fuel prices.

Aurangzeb highlighted a more general policy change, emphasizing that the government is moving from a blanket subsidy system to a targeted subsidy regime, guaranteeing that financial assistance reaches only those who truly need it while lowering the overall fiscal burden.

In terms of energy conservation, he said that, as part of a national initiative to lower electricity usage and encourage efficient energy use, market operation hours will be reassessed beginning next week.

The finance minister reaffirmed the government’s commitment to social protection, fiscal restraint, and economic stability, pointing out that these initiatives are a part of a calculated plan to strike a balance between macroeconomic sustainability and public assistance.

According to Aurangzeb, the country’s leadership was consulted before the crucial decision to raise fuel prices was taken.

He continued by saying that regional administrations will be consulted before a final decision regarding the market times was reached.

In the meanwhile, the federal government raised the petroleum tax (PL) rate on gasoline by Rs 55.24 per litre while lowering it to zero on high-speed diesel (HSD) with effect from April 3, 2026, in accordance with the budgeted aim for PL on petroleum products.

The petroleum levy on gasoline has gone up to Rs 160.61 per litre, while there is no PL on HSD. Previously, the price per litre of gasoline was Rs 105.37. Kerosene oil has a PL of Rs 20.36 per litre, whereas LDO has a PL of Rs 15.84 per litre.

According to a statement from the petroleum division, the price of gasoline has climbed by Rs 137.23 per litre and that of HSD by Rs 184.49 per litre, while the price of kerosene oil has grown by Rs 34.08 per litre and that of light diesel oil (LDO) has increased by Rs 29.41 per litre.

The new fuel and HSD prices are set at Rs 458.41 and 520.35 per litre, respectively. In contrast, the LDO cost is set at Rs 395.03 per litre and the price of kerosene oil is maintained at Rs 467.48 per litre.